Daly city short term rental White Paper

S H O R T
T E R M
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D A L Y C I T Y , C A

D A L Y C I T Y - S H O R T T E R M R E N T A L
I N T R O D U C T I O N
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Short-term rentals have been around since the 1950s, but their astronomical
rise into the mainstream is a key defining factor of the hospitality industry over the past
decade. In a fast-moving world, long-term conventional rentals are expanding whereas
short-term rentals are exploding. Our research estimates that the total consumer market
for short-term rentals totalled $107 billion in 2019. It was expected to grow at 7% year-
over-year, pre COVID-19 economic conditions. The impact of COVID-19 has been widely
witnessed in the short-term rental industry as well.
The short-term rental ecosystem goes far beyond major platforms and is even
thriving during the economic crisis. COVID-19 has increased the scope of guests who
were typically only travelers, but now also include numerous millennial working crowd
such as gig economy workers, blue collar workers, and ones who get paid wages on a
daily basis, all whom are starting to utilize such facilities to secure a roof. The short-term
rental sector is increasingly converging with other travel accommodation sectors. Real-
estate investors and property landlords are also increasingly interested in the potential of
the short-term rental market. Though, the hotel sector at an estimated $600 billion gross
bookings, is still considerably larger.
There is an ongoing discussion about the impact of the short-term rental sector on
housing availability and house prices, especially in the urban areas. This discussion is
largely marred by limited information and data, and strongly opinionated opposing
camps. The short-term rental sector can provide an interesting alternative to long-lets for
landlords and property managers, but the data on the overall impact of short-term
rentals on housing stock and prices is still limited.
Daly City is one of the fastest growing housing markets in the Bayarea with new
residents moving in every day. Daly City has the potential to house residents from every
income section of the society. Short-term rental as an option for affordable housing will
be discussed here in detail.
This report seeks to explore the history of short-term rental, understand how its
public pronouncements deviate from observed facts, and identify the tangible and
intangible effects that this model is having on our housing market, neighborhood
cohesion and public revenues. A key component of this report is its analysis of the short-
term rental market in Daly City based on a snapshot of available listings on September 15,
2020. Through the application of freely available code, we have collected a
comprehensive set of data[1] that includes information on hosts, prices, listing locations
and listing types and guest types. These data provide a great deal of insight into the
contours of the operations and effects on Daly City housing market.
[1] - all the data used in this document have been sourced from AirDNA.ca, City of Daly City's official website and public and privat
e reputed statistical organizations and neews agentcies. but not limited to publicly available online resources. We have cited all the arguments and definitions possibly and have justified them throughout the document.
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© Copyright Reserved by iCapital Management Inc
PREFACE
This report is prepared on behalf of Crashpadz Inc, Daly City by iCapital Management Inc. In this report, we have provided our findings
about the short term rentals market and the impact of the ordinance and our recommendations after understanding the overall short
term rental industry. All the information published in this report is a copyright of Crashpadz Inc. Please contact us for any clarification
info@icapitalmanagement.com.

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B U S I N E S S R E V I E W
MISSION
Outlining a reasonable dialogue to demonstrate the short-term rental's current
operational condition, the effects on community and hosts responsibilities and
also how regulations can create a positive environment for all the stakeholders
and regulators.
VISION
Explore potential opportunities to solve the housing crisis of Bayarea and to
redefine housing for multiple sections of society.
GOALS
Regulating and Licensing
100% Host Compliance
Civic Responsibility
Transient Occupancy Tax Revenue
Affordable Housing
Temporary living solutions
Host Accountablity
DEFINITIONS
Here are some basic definitions that all the researchers have mutually agreed
upon and considered throughout this report and each definition have been
cited to its source.
For purposes of this division, defined terms appear in italics. The following definitions
apply in this division:
“STR or Short Term Rental” - Short-term rental describes furnished self-contained
apartments that are rented for short periods of time, usually less than 30 days as
opposed to annual commitment in the unfurnished Single Family House/ Apartment
rental market.
“LTR or Long Term Rental” - A long-term rental is typically considered rental of a
residential property for anything six months or longer.
“Single Family House” - A single-family home is an independent residential
structure that sits on its own land and is designed to be used as a single dwelling
unit, having just one kitchen, unshared walls and unshared utilities,

“Host” - Host means an owner or tenant of a dwelling unit who rents his/her primary
residence for home-sharing throughout this document.
“Guests” - means any person who exercises occupancy or is entitled to occupancy
by online reservation, walk in bookings, right of access, license or other agreement
for a period of thirty consecutive calendar days or less. Any such person so occupying
space in a home shall be deemed to be a guest until the period of reservation as per
the agreement in writing between the host and the guest.
“Property Managers” - Owner himself or the representative of the owner living in the
particular house/apartment which is offering short term rental accommodation.
Property Manager usually takes care of the estate and guest relations and facilitate
support. Property Manager will usually act as the first point of contact for any
concerns related to the particular short term rental property
METHODOLOGY:
Being a service provider in the Data Analysis and the consulting domain,
we reach out to organizations facing enforcement challenges in the short-term
rental industry. iCapital Management Inc has developed a line-up of proprietary
analytical tools and proprietary data-set that enable us to gain deep insights into the
market-scope and the scale of short term rentals in various social communities. This
allows us to provide our clients with the means of implementing effective and
economical enforcement of short-term rental regulations. For this report, we’ll share
our market insights for the City of Daly city.
Our data, that has been continuously collected ranging over weeks of
accumulation, was aggregated after extensive sorting, duplicate entries ranging over
multiple platforms were filtered. Reviews, calendar information and pictures were
organized from the 50 leading short-term listing online platforms. Our estimation
tells us that this report blankets over 99% of total short-term rentals in the City of
Daly City jurisdiction.
The research was conducted mid-August of 2020 and the integrity of the
data within this report can be highly vouched for, to accurately represent the
market-scope and scale of short-term rentals in the City of Daly City as per the day
of this report. With this addressed, we need the reader to understand that this data
is a momentary reflection of the short-term rental market during the period this
data was collected. Data collection over multiple online platforms does provide
comparatively easier access, but convolutes the process of organization, sorting and
filtering of the raw data collected. For example, one renter may want to provide their
rental unit advertisement over multiple online platforms, or even multiple entries on
the same platform.
Our approach is to remove the duplicate entries to provide a more accurate
representation of the market scenario of the short-term rental units of each area in
the City. The data integrity in this report is achieved after a break-down of active
listings, listings which are categorized as short-term rental listings and unique rental
units. We also covered unidentified categories of short term rental which was never
discussed before in previous research papers.
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The concept of renting rooms or homes on a temporary basis is not new. Vacation
rentals have long been common in beachfront communities, resort towns, and other
destination hotspots. But with the recent rise of the internet platforms the number of
short-term residential rentals (usually defined as rentals of less than 30 days) has
grown dramatically and elevated the awareness of this practice within more
communities. In addition to more traditional, commercially focused vacation rental
properties, more and more homeowners (and in some cases tenants) are offering the
use of their residences — or rooms within their residences — as temporary rentals,
either sporadically or on an ongoing basis.
SHORT TERM RENTAL
Vacation Rentals
Hostels
Coliving
Coliving STR (Hybrid)
Residential Hotels
Currently the most popular practise in the market is where the homeowner lists
their property on multiple online platforms like Airbnb and Homestay that offer
listing services for daily or weekly reservations usually less than 30 days. On the other
hand the market for affordable housing also tapped into the short term rental
market, where multiple businesses that are redefining the housing market by
adopting affordability and convenience to target the millennials entering the job
market. We will understand the types of short term rental in existence and explore
the facts and figures in details to understand the subject in depth.
TYPES OF SHORT TERM RENTALS
VACATION RENTALS:
A vacation rental is the renting out of a furnished apartment, house, or professionally
managed resort-condominium complex on a temporary basis to tourists as an
alternative to a hotel.
These are the ones which are directly listed by the homeowners themselves in online
platforms like Airbnb and Homestay. There are around 560 active vacation rentals listed
online as per AirDNA.co, a website that shares collective market data about short-term rental
listings from publicly available sources. There are various types of vacation rentals in itself.
Many properties are listed on an entire house basis without any host for the rental period
where the guests could treat the property as their home during the stay. There are few that
offers private rooms in a house which is occupied by the resident or even shared
accommodations where guests have to share the entire facility. Both of these are typically
hotels where either the homeowner, master-tenant or the property manager physically
resides in the premises.
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HOSTELS:
Hostels are commercial establishments that provide affordable food and lodging for a specific
group of people, such as students, workers, or travelers. The concept of hostels is quite
prevalent across the world and has a presence even across America. Hostels are usually seen
in big cities and tourist towns.
COLIVING:
Coliving is a type of intentional community providing shared housing for people with shared
mindset. This may simply be coming together for activities such as meals and discussions in
the common living areas, and even may extend to shared workspace and collective
endeavours such as living more sustainably. There are multiple coliving facilities operating in
Daly City since 2016.
Coliving STR
These coliving accommodations are usually organised by a businesses as a service to its
guests who range from locals, newly moved residents and even working group people. A
lot of tech workers, gig workers and millennials in general prefer such shared living
arrangements nowadays to avoid the hassle of year long leases and security deposits. In
the recent days there are hybrid coliving accommodations have started giving flexibility
to guest with membership services where guest have the comfort of choosing the
location and duration of stay.
RESIDENTIAL HOTELS:
An apartment hotel is a serviced apartment complex that uses a hotel-style booking
system. It is similar to renting an apartment, but with no fixed contracts and occupants
can "check out" whenever they wish. It is very famous in Europe where houses are
typically converted into a hotel and offered to guests on a per night basis and these
generally tend to be family owned.
Source: Data Collected from AirDNA as of 09/12/2020 about vacation rentals and data
about coliving spaces/hotels from publicly available search engines and collected
market data.
CURRENT MARKET PRACTICES & TRENDS
The rise of coworking is a natural predecessor for widespread coliving: the concept that
people can live in a shared space without recreating the feeling of living in a college
dorm. Taking advantage of large houses and lonely millennials, coliving has become the
newest disruption of surplus space in the real-estate industry. While there are certainly
bumps on the road ahead for the new coliving industry players, only equitable legislation
and proper governance would help organize the businesses for the betterment of host,
guest, community and city coffers.
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DALY CITY
The City of Daly City is the largest city in San Mateo County with an estimated
population of 106,472 as of July 2016. Daly City is a coastal community located at the
northern edge of San Mateo County, approximately 7.7 square miles of substantially
developed area. The City is known as the "Gateway to the Peninsula", and its area
extends to the Pacific Ocean on the West, and nearly to San Francisco Bay towards
the East.
Daly City is also the gateway to Silicon valley, home for many tech companies. Daly
City is located perfectly in-between SFO Airport and San Francisco city and is also
accessible to San Jose and other parts of silicon valley. The City offers some of the
best conditions for the residents, and has attracted a horde of millennial population
leading to a diversified group of residents from differing demographics.
SHORT TERM RENTAL IN DALY CITY
There are multiple short term rental options available at Daly City at any given point
of time. The graph below shows the concentration of Airbnb type vacation rentals.
There are also coliving spaces which provide daily/weekly accommodations. In the
past few years coliving accommodations have flourished in Daly City considering its
demographics, and the convenience it offers has become paramount. These facilities
house a considerable number of people that includes tourists as well as locals. The
below graph should give a pictorial representation of the conjunction of different
types of short term rentals available in Daly City
https://www.airdna.co/top/us/california/daly-city
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RATE OF HOME OWNERSHIP
We would like to display a few data here
sourced from public and reputed private
statistical organizations which would stitch a
scenario for us to understand the industry
further.
Current Population of Daly City: 106,598
Total Number of Houses in Daly City: 32,765
Owner Occupied Homes : 18,054
Renter Occupied Homes: 13,566
Total Number of Vacation rentals: 368
Total number of beds/
rooms listed per night in Daly City: 560
Median rent for a Single Family Home
in Daly City: $1,898
Newly Developed Houses
in last 10 years- 341
F A C T S & F I G U R E S
57.1%
MEDIAN RENT
$1,898
https://worldpopulationreview.com/us-cities/daly-city-ca-population | https://datausa.io/profile/geo/daly-city-ca/
http://population.city/united-states/daly-city/ | https://www.towncharts.com/California/Demographics/Daly-City-
city-CA-Demographics-data.html
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More than 480,000 economically insecure households pay on average $9,000
more than they can afford on rent annually—adding up to $4.4 billion that they
could be spending on their family needs and in the regional economy.
Between 2000 and 2016, rents increased 24% while renter incomes rose just 9%.
Six of every 10 economically insecure residents are renters and 75% of them pay
unafforable levels of rent for housing (more than 30% of their income).
BAYAREA HOUSING CRISIS
California’s housing crisis has reached epic proportions in the Bay Area. From
displacement and homelessness to employers struggling to find workers who can
afford to live anywhere near their place of work, housing has become the Achilles'
heel of one of the strongest economies in the world.
More than 6 of every 10 households are now at risk of displacement, according to the
University of California–Berkeley’s Urban Displacement Project. And despite the
booming economy, 3.2 million residents are economically insecure and do not have
enough income to make ends meet.
The twin forces of a housing shortage—particularly affordable housing—and uneven wage
growth have converged to create a regional crisis. Between 2011 and 2015, the Bay Area
added 500,000 jobs but built only 65,000 new homes. As high-wage knowledge-
economy workers bid up the cost of homes, low-income families have been pushed into
deep housing and economic insecurity, and out to the edges of the region and beyond.
A family of two workers each making $15/hour that adds up to a yearly household
income of $62,400 can afford the median market rent in only 5% of the Bay Area’s
1,500-plus neighborhoods.
92% of the neighborhoods affordable to these working-class households are rated
“very low opportunity” on a comprehensive index of neighborhood opportunity.
source:
https://www.policylink.org/sites/default/files/SFF%20Housing%20Crisis%20Report%20201
8%20Digital%20fnl_0.pdf
IMPACTS OF COVID-19
If this pandemic has taught us anything, it’s to prepare for the unexpected — whether
that is a global health crisis or what comes after. Having smart regulations and the right
technology can help you care for the community and ensure that short-term rental
controversies do not surface and derail other important initiatives that are critical to our
community’s recovery.
While the world feels different during the pandemic, we can look at home-sharing trends
throughout the last century to see what is likely to transpire post crisis. While few may be
renting during the pandemic, the negative effects on the economy leads us to believe
that the number of STRs will grow with time, as trends suggest that many would seek
supplemental income sources and require cheaper short term housing options with
flexibility and comfort.
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During the Great Recession in 2008, the pendulum swung back in favor of shared living
arrangements inspiring people to search for creative methods to make ends meet. Airbnb was
officially launched during the 2008 crisis. As COVID-19 restrictions are lifted during the upcoming
months, cities and counties are expected to face a barrage of challenges relating to short-term
rentals if they don’t preemptively adopt and enforce thoughtful regulations, that ensures
community-level functioning of short-term rentals.
According to the latest analysis of weekly US Census data, as federal, state, and local protections and
resources expire, in the absence of robust and swift intervention, an estimated 30–40 million people
in America could be at risk of eviction in the coming several months. Many property owners who
lack the credit or financial ability to cover rental payment arrears, will struggle to pay their
mortgages and property taxes and maintain properties. The COVID-19 housing crisis has sharply
increased the risk of foreclosure and bankruptcy, especially among small property owners; long-
term harm to renter families and individuals; disruption of the affordable housing market; and
destabilization of communities across the United States.
source: https://granicus.com/news-press/
Source: https://www.aspeninstitute.org/blog-posts/the-covid-19-eviction-crisis-an-estimated-30-40-million-people-in-america-are-at-risk/
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Source: https://julianalee.com/daly-city/daly-city-statistics.htm
Source: https://julianalee.com/daly-city/daly-city-statistics.htm
The graph below shows how the bidding wars have reduced since 2016 and the short term
rental has very negligible amount of effect on it.
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Source: https://www.rentcafe.com/average-rent-market-trends/us/ca/san-mateo-county/daly-city/
The chart below shows the average rent of houses in Daly City haven’t skyrocketed after the occurrence of short
term rental. It's not the short term rental which drives the prices of the houses. It's the impact of the whole
housing crisis.
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Source: https://www.bestplaces.net/economy/city/california/daly_city
If you see the above graph hardly 1% of the housing in rental market is below $1,000-1,500. But
a big percentage of the population makes less than $40,000 a year and they cannot afford to
rent houses from the long-term rental inventory, as they wouldn’t be able to commit to lease
for a year without job security and higher pay rise. The current unemployment rate of Daly City
is 2.2% whereas the amount of available houses for rent is less than 1% for the affordable
housing category. On 12/10/2018 City of Daly City adopted inclusionary housing act where they
discuss about “The City Council desires to provide and maintain affordable housing
opportunities in the community through an inclusionary housing program for both ownership
and rental housing. “
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No credit checks or lease agreements required: simply submit your debit or credit card at check-
in.
Minimum 1 day to maximum 28 days.
Helps new residents and potential homeowners to test the waters and understand the
neighborhood before making a commitment or investments.
No lengthy leases.
Guests are termed as licensee's, it becomes easier to deal with the nuisance and problems.
Property managers can help local Police in ensuring 100% compliance and accountability.
Transparency in the reservation rates available online.
Socializing and sharing space help build friendship, brings harmony and peace in the
community.
SHORT TERM RENTAL REDEFINING HOUSING
Modern day hybrid Coliving relieves the burden of wasteful consumption of resources, by
maximizing the efficiency of utilization of the space per capita. Thus, contributing towards a
greener planet. In the current times, this aspect cannot be overlooked as taking consideration of the
skyrocketing rents in Bay Area that is already encouraging many millennials and local residents to
seek other available options for housing. Hybrid Coliving offers a lot of convenience and comfort
within budget for people, hence, freeing up their time to focus on working and saving-up capital
and enabling them to move up to their desired position in lives. We can say that Airbnb provides
accommodation for transient guests, but on the contrary hybrid coliving offers accommodation for
people who are transient in their life.
There is a common opinion that the most of the nuisance occurs in the Airbnb that are rented out
as an entire property without any host presence, and are generally used for parties and loud music.
Many have also emphasized the problems in parking.
Our research team has put together an extensive analysis to understand what the actual
complaints are, how many of them occur and how frequently they occur in the latter part of this
report (See page 15).
BENEFITS OF SHORT TERM RENTAL:
Short term rental in housing have lot of benefits:
How Butte County, CA benifited from their short term rental law?
Butte County in California passed a short term rental ordinance on April 25, 2019 where they also
took into consideration the use of short term rental accommodation for housing displaced people
during disasters. During the recent California fires, Airbnb helped house thousands of locals in
Airbnb properties and also opened a hotline for people evacuated or displaced by wildfires. Many
hosts supported this initiative and welcomed many guests during hardship.
source:
https://www.airbnb.com/openhomes/disaster-relief/ https://nypost.com/2020/08/25/airbnb-
offering-free-housing-to-california-wildfire-evacuees/
https://www.buttecounty.net/Portals/10/Docs/BS/2019/ShortTermRentalsOrdinance.pdf?ver=2019-
03-27-164757-210
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Daly City Community center Shelter in Place Housing:
The Daly City Community Center was able to utilize short term rental accommodations for many
displaced people who otherwise would not have had a roof over their head during the pandemic.
Coliving and short term rentals housed many people during the shelter in place order. Foreign
Embassy's and Diplomatic Missions were able to house many travelers and workers who were
stranded and unable to reach their home cities due to the lock down.
Tourism in Daly City:
Visitors of Daly City will find many great attractions and things to do in this Bay Area community.
This municipality is not far from San Francisco and other major cities in the Bay Area. Since being in
the close proximity of San Francisco and other major cities of Bay area, the preferred choice of
accommodation for tourists and travelers in recent years been Daly City. Since tourists and travelers
are considered active spenders, with the right environment and support, short-term rental owners
can cater to the market which is high in demand and encourage local employment and business
opportunity.
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Nuisance & Party House
Parking
Strangers in neighborhood
Policing
PROBLEMS REPORTED ON SHORT TERM RENTAL
NUISANCE:
The most common complaint received by law enforcement from the neighbors of short term rental
is nuisance. Range of complaints from loud music, smoking or drinking on the sidewalk .
Every Short term rental should operate under the presence of the host 24/7 and the property host/
manager should be available for communication to the law enforcement to mitigate and work hand
in hand to ensure 100% compliance. Since short term rental guests only have the license to use the
property and are not considered as tenants it would be easy to terminate a reservation when a guest
has displayed unruly behavior or broken host rules.
PARKING:
It has been observed that majority of the guests do not own car. For the cases where they do own a
vehicle, the guest could utilize the parking available on the property and the public parking around
the property as any other guest's or residents would be entitled to.
STRANGERS IN NEIGHBOURHOOD:
In a recent interview a group of San Francisco based home owners complained about the short-term
rental near their house. The complaints ranged from many unknown guests arriving all day in Uber
and there are a lot of strangers living together. Many times the neighbors complain about ringing
wrong doorbells.
Every short-term rental should collect the ID from the guest and the guests should sign a registration
card with the terms and conditions to abide by the local law and policies of the property. Every new
person moving to a new place is a stranger and every one of us would be a stranger at the place we
recently moved to. Also the city may consider recommending some signs (non-marketing purpose)
to be placed in front of the doors to guide the guest to the right entrance.
POLICING:
Every short term rental operation should be in 100% compliance to the city’s short term rental laws
and also help police in making Daly City safe for all residents and visitors.
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MYTH BUSTERS
Misinformation about how the short-term rental is destroying the inventory of the long-term rental
market is widespread. But the economics behind housing through short-term rentals rather displays a
positive economic impact on the average renters and the overall market.
In California alone more than 24% of the houses are occupied by a single person which also reduces
the housing inventory since the household is under occupied. The average monthly income of age
group 18-35 is between $2,065 - $4,136. The average household rent in Daly City for a single family
house $2,605/month.
In the struggling economic conditions, a lot of young people stepping up in their life relying on gig
work and rideshare jobs are daily wagers who get paid on a daily basis. Short-term rental provides a
network of support for such gig workers. They get the comfort to pay their rent on a daily basis and
afford a decent place to stay. The economy with a growing gig culture and sharing mindset, when a
person cannot afford to pay $2,605 rent, they opt for short-term rental options till the time they could
afford to get their own long-term rental accommodations. Even if a group of people got together to
chip in and rent a house together, they would all have to be bound together under the lease, making
it a highly inflexible long-term setting and rendering such an option virtually unfeasible.
FICTION: Short term rentals are popping up everywhere and taking over our neighborhoods!
FACT: The 460 unique properties used as short term rentals in Daly City (as reported in the Host
Compliance study the City of Daly City paid for in August 2019) represent less than 5.8% of the 8245
rental housing units in Daly City.
Reference: https://www.towncharts.com/California/Housing/Daly-City-city-CA-Housing-
data.html#:~:text=Daly%20City%20indicates%20it%20has,other%20places%20in%20the%20area.htt
p://www.dalycity.org/Assets/Departments/Economic+and+Community+Development/planning/Shor
t-Term+Rentals/March+11$!2c+2019+Study+Session+Staff+Report.PDF
FICTION: Regulations do not work!
FACT:
Equitable regulations that gives equal weight to host, guest and community have the propensity to
make great traction towards an agreed upon solution. For example business and host's currently
hosting should be allowed to to apply for permits in a streamlined process in order to not disrupt the
current operation which would negatively impact not only the host but the guest staying there. Guest
are expected to follow the rules of the host and city. Failing to follow them, their reservation will be
terminated and they will be removed of the property, this will mitigate any disturbance in the
neighborhood.
FICTION: Short term rentals attracts dangerous strangers, criminals and sex offenders!
FACT: We didn't find anything other than scattered anecdotes among the millions of short-term rental
stays concerning any criminal behavior, sexual deviancy or crimes against children. These are
unfounded fears and any actual problems are more of a reflection of our society at large than a by-
product of short term rentals. P A G E 1 6

FICTION: Short term rentals are mostly owned by big investors taking over large swaths of
neighborhoods!
FACT: According to the Host Compliance study the City of Daly City paid for and released in
August 2019 “over 69.40% of STR operators in Daly City have only 1 property”.
Impacts if current proposed short term rental ordinance's
FACT: The ordinance would make over 90% of existing short term rentals illegal where the vast
majority of which do not even have any complaints lodged against them.
FACT: Many law abiding citizens who rely heavily on their short term rental to make ends meet
would be uncomfortable with violating the law and would feel pressure to shut down and by
doing so face some really tough choices.
-Like Michael who recently moved to the Bay Area before COVID-19 struck. His short term rental
accommodation means that he doesn’t have to take another job for survival but is able spend
more time working on his passion for photography.
-Robert is a Doordash delivery driver and he earns $ 100 -$150 a day after 8 hours of work and the
only way he could put a roof on his shoulder is by choosing to live in a short term shared rental.
He likes the flexibility of his rental option where he gets to pay $ 30 a day and able to use the
whole house.
- Or MJ who lost his job due to COVID-19 and surviving on the social security benefits. He didn’t
have any income for 3 months but his short term rental property owner worked with him to
ensure he doesn’t go homeless till he got his unemployment check.
Positive economic impacts of short term rentals in local economy
Short-term vacation rentals brings a positive economic impact to a city or county in several ways.
For example, they provide a city with an additional income through tax revenues. At the same
time short-term vacation rental guests can benefit the community as a whole in terms of
economic benefit because guests will spend their money in other visitor related amenities such
as restaurants, bars and grocery stores. Research in San Diego showed that $86.4 million was
spent on such activities by visitors staying in short-term vacation rentals. The total economic
impact in San Diego has been estimated at $285 million. Additionally it can help local residents
make ends meet or enable young families to go on a holiday while retirees stay in their homes.
source:
http://www.nusinstitute.org/assets/resources/pageResources/NUSIPR_Short_Term_Rentals.pdf
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The current draft of the Daly City's short term rental ordinance proposes "Short-term rentals shall
not be advertised for or used by more than two guests per bedroom plus two additional guests
at one time" This would force the hybrid coliving short term rental accommodations to under
utilize the house for rental purposes. This would result in the increase in the price per bed which
would become a price burden similar to the long term rental and those who relied on these
short term rental for temproary residence would be highly affected.
Amnesty period Sept 22, 2021 - for the existing unpermitted use of short term rentals. During
this period City of Daly City should consider giving priority to the existing unpermitted use short-
term rentals to apply for the necessary licenses and permits to have uninterrupted operation
during the transition period. This would encourage the stake holders to become 100%
compliant to the new ordinance.
"Short-term rentals shall be limited to one booking per property per day." - This would be
practically impossible for the hosts to limit reservation to 1 per day since many hosts depend
upon multiple guest reservations per day and their business model would be highly hampered.
The City council should reconsider the occupancy and reservation allowed per day to support
operators. For example Butte County, City of Arlington and few other cities and counties have
passed their short term rental ordinance in the past where the occupancy is determined by the
properties size and number of beds made available for guests. Source:
https://www.arlingtontx.gov/common/pages/DisplayFile.aspx?itemId=15539230
Short term rental have a huge potential of revenue for the City of Daly City - The current
business license annual tax model for short term rentals is gross receipts x .005 and for example:
One of the short-term rental Crashpadz Inc. disclosed that they had a gross revenue of $361,323
in the year 2019 alone. With the current business license annual tax the company paid $1991.27,
Placing transient occupancy tax of 12.5% would have netted the city a whopping $ 45,165.37 in
tax collection
Daly City is failing to tap into the potential revenue stream. With the new short-term rental
ordinance with a TOT of 12.50%, the city would be able to increase tax revenue and utilize it for
spending for inclusionary housing.
RECOMMENDATIONS TO THE CITY OF DALY CITY FOR THE SHORT TERM
RENTAL ORDINANCE
The following are the case study of few cities which benefited both socially and economically
from short-term rental revenues.
How a city brought 200 short term rentals into compliance in 6 months with host compliance
https://granicus.com/how-one-village-increased-str-compliance-by-38-leading-to-673k-collected-
in-taxes/
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